The Singapore-based company is targeting sustained profitability after years of spending to grow its market share and fend off competition. — Bloomberg
SINGAPORE: Grab Holdings Ltd reported quarterly revenue growth that trailed estimates, highlighting the challenges for the South-East Asian ride-hailing and delivery firm as it tries to reach sustainable profitability.
Shares of Grab slid more than 8% in pre-market trading in New York after the company said revenue rose 17% to US$664mil in the three months through June, missing the US$676.9mil analysts predicted on average.
Adjusted earnings before interest, taxes, depreciation and amortisation were US$64mil, roughly in line with estimates.
Grab, the largest of South-East Asia’s ride-hailing and delivery firms, is trying to prove its brutal cost-cutting drive is yielding results.
The Singapore-based company is targeting sustained profitability after years of spending to grow its market share and fend off competition.
Yet Indonesia’s GoTo Group is proving a tough rival, keeping prices low and margins thin for both companies as they battle it out in the Southeast Asian market of 675 million people.
Shares of Grab, which had been one of Southeast Asia’s hottest startups, are down 69% since it went public through a US blank-check company in late 2021. Still, they’ve stabilized this year as its losses narrowed, outperforming its main regional rivals.
Grab, backed by Uber Technologies Inc., is seeing growth slow from triple-digit rates in recent years as customers in the region curb spending to cope with elevated inflation and interest rates. Demand is increasing at a slower pace as Grab’s customer base expands and consumers are less willing to hail a ride or get food delivered to their door in a challenging macroeconomic climate.
Second-quarter net loss narrowed to US$53mil from US$135mil a year earlier. Profitability on net income basis, which it has not set a concrete timeline for, will be the next big milestone in Grab’s effort to prove to investors it can make money. — Bloomberg
